From Sydney Morning Domain:
Australia’s property brokers are cashing in on China’s stock market calamity. The almost $US4 trillion rout is fuelling demand for less volatile assets in one of China’s favourite real-estate markets, where a plunging Australian dollar is making property cheaper for offshore investors.
Chinese developers last month snapped up most of the 15 sites in and around Melbourne sold by CBRE Group – five times the property broker’s usual monthly tally. The bulk of the deals were sealed after the Shanghai Composite Index started tumbling.
“It would seem that they’re actually doubling down,” said Mark Wizel, a senior director for CBRE in the city. “There’s been a genuine acceleration for the past three weeks.”
The flow of Chinese cash risks inflating Sydney and Melbourne house prices that are already beyond the reach of many Australians. Further price gains would be a headache for central bank Governor Glenn Stevens because they make it harder for him to cut interest rates to stimulate a slowing economy.
Come now. You’re telling me that Chinese property developers panic bought sites in Australia last month after the Shanghai crash. They didn’t plan the purchases months if not years in advance, they just saw Shanghai falling and “thought let’s buy land in Australia.”
As well, why is this a headache for Glenn Stevens given these are sites to be developed and will weigh on prices with new supply?
As for a falling currency making things cheaper, that is a risk not an upside to investment in Australia if you’re offshore. If the Shanghai crash does reverberate through the Chinese economy then Australia and Australian property is the last place you want to put your money given you’ll see both property price and currency losses.
Either Chinese developers are complete twats or the Sydney Morning Domain is.
